The European Institute of Innovation and Technology (EIT), set up three years ago, is still in its infancy but the European Commission has already called for a €3-billion budget boost to help it reach cruising speed despite criticisms over meagre results and excessive bureaucracy.
Androulla Vassiliou, the EU's Education Commissioner responsible for the EIT's management, defended the institute's "first concrete results" at the at 'Entrepreneurship Awards' last week (21 February).
The prizes rewarded three start-up companies that were created as part of the EIT's three knowledge and innovation communities (KICs), launched in December 2009 in the areas of climate change, sustainable energy and ICT.
The KICs are being touted as Europe's "innovation factories". They aim at building bridges between students, researchers and entrepreneurs in order to close the "knowledge triangle" and bring innovations to the real world of business.
One of the award winners is Naked Energy, a British company which has developed hybrid solar photovoltaic and thermal panels to generate both hot water and electricity. Another is a German ICT firm, Trifense, which specialises in protecting computer networks against cyber-attacks.
"Knowing that only three years ago, it was only on paper and now we have so many important projects which are about to create new businesses, new innovation in Europe is really a proof that this EIT is working," Vassiliou claimed.
Shortcomings and inefficiencies
However, not everyone thinks the EIT has been so successful.
An independent evaluation of the EIT's first three years of operation, published in May last year, demonstrated broad support for the institute's objectives and recognised the launching of the first three Knowledge and Innovation Communities (KICs) as a "substantial achievement".
But it pointed to "inefficiencies in the implementation" and staff who were "ill-suited to the operational role that [the EIT] was trying to forge."
Headquartered in Budapest, the EIT soon experience teething problems, with "tensions" emerging between the EIT and European Commission staff, leading to "misunderstanding, frustration and inefficient behaviour," the report said.
"As an organisation it has struggled to consistently provide a professional image, with the requisite balance of experience and expertise across all of its functions. It does not yet form the reference model to which it aspires," the report pointed out.
The Commission took some of these criticisms onboard but strongly defended the EIT's concept and preferred pointing to deficiencies in the implementation.
Commission calls for more funds
Despite these shortcomings, the European Commission tabled a proposal in November for boosting the EIT's budget to €3.2 billion for 2014-2020, a tenfold increase on the €309 million it received for the period 2008-2013.
"More money means also more KICs," said Vassiliou in response to questions from a journalist, adding that six new ones were expected to be created in the coming years (three in 2014 and three in 2018).
The bulk of the money, she said, will go to the three existing KICs because they are in their development stage. "The longer you stay alive, the more money you need because you can absorb money because you are developing. In the initial stages, you need less money."
Presenting the proposal in November last year, Vassiliou said she expected the EIT to provide an impetus for creating up to 600 start-up companies, training 25,000 students and 10,000 PhDs in new curricula combining excellent science with a strong entrepreneurship component.
No blank cheque from Parliament
But the European Parliament, which will vote on the EU's next seven-year programme for research, called 'Horizon 2020', appears unwilling to sign a blank check for the EIT.
Teresa Riera Madurell, a Spanish MEP who has been charged with drawing the European Parliament's opinion on Horizon 2020, said the Commission's massive funding boost for the EIT risked diverting funds from fundamental research. "Shifting the focus too much towards funding short-term, close-to-market innovation could come at the detriment of more long-term, fundamental research that often is the source of radical, disruptive innovation."
"A clear example of change of balance in the Commission is the considerable budget increase allocated to the EIT," Madurell wrote in her draft opinion on 'Horizon 2020'.
"It merits some reflection," she wrote.
Christian Ehler, a German Christian Democrat MEP who follows EU research issues for the European People's Party (EPP), was even more sceptical. "Barroso is about to create a white elephant by septupling the EIT's budget without having evaluated the programme's outcome and results so far," he told EURACTIV in emailed comments.
'An act of faith'
Philippe Lamberts, a Green MEP from Belgium who is drafting a European Parliament opinion on the EIT, said he remained to be convinced about the added-value of the institute.
"I want to see a solid business case before saying 'yes'," Lamberts told EURACTIV, adding: "So far I have not seen a compelling business case."
"I understand that this is a pet project of a certain José Manuel," Lamberts added in relation to the funding boost for the Budapest-based institute demanded by Commission President Barroso.
However, Lamberts believes the budget proposed for the EIT – €3 billion for the period 2014-2020 – is not a problem in itself, but more "an act of faith" in view of the EIT's limited results so far. "Three billion, it makes me laugh anyway," said Lamberts, when seen in comparison with the €15 billion earmarked for ITER, the EU's nuclear fission reactor.